Hon. Roger Teillet (Minister of Veterans
Affairs) moved the second reading of Bill No. C-126, to amend the Army Benevolent Fund Act.
He said: I must correct certain of the information I gave to the hon. Member for Fraser Valley (Mr. Patterson) the other day in answering a question as to rates of interest. Reading the statement I had in front of me, I skipped a line and told him the rate was now 3 per cent. The actual figure will emerge from the brief statement I now wish to make.
The Fund was established by the Army Benevolent Fund Act in 1947. The original net worth of the fund was $9,293,477. The original interest rate was 2| per cent. The plan for the fund was that there would be prospective beneficiaries for 50 years and that payments for the first 30 years would average $473,000 a year, with much smaller payments during the remaining 20 years. During the last ten years disbursements have averaged approximately $520,000 a year. The net disbursement in the fiscal year 1964-65 was $451,544.
The Act was amended in 1952 to increase the annual interest rate to 3i per cent on the first $5 million, and 2| per cent on the excess. In 1961 interest rates were again increased to 4 per cent on the first $5 million and 3 per cent on the excess. These rates are still in effect.
The fund has decreased more rapidly than was originally intended and on March 31, 1965 it amounted to $5,552,078. During the fiscal year 1964-65 the fund assisted in 3,085 cases. Because it is considered important that the fund continue to operate in accordance with the original plan, and because interest rates have tended to increase, the bill proposes a rate of 4| per cent per annum for a period of five years, and provides for further quinquennial adjustments in the rate by the Governor in Council. This proposal will result in increased interest payments of approximately $34,000 a year during the first five year period.
